There are actually some businesses that are in risk when it comes to their cash. Some are comparing and are contrasting all of the financing options available. You could possibly head to the bank and then apply for a loan, but you must not only limit to thinking just that. Merchant cash advance or MCA are in fact good options for a business that needs some extra money. What you will learn below are some comparisons of an MCA and a regular bank loan.
Approval is Easier
If your business’s credit history is one which is not that good, you could find it hard to get an approval from a traditional bank loan. This is actually because banks have strict guidelines and they also dictate as to who they lend some money to.
MCAs actually are a lot easier when it comes to getting approvals than that of regular loans. As long as your business accepts credit card payments and also debits, you likely are going to get approved for MCA. This in fact is because through an MCA, you could then pay a portion of the credit card sales and debt to the loan automatically. The lender also could get guarantees that the chance of you not being able to repay the loan is lower.
If you have acquired a loan from a bank before, you certainly know that a certain amount is going to be due month after month on a particular date. If you will not follow from that arrangement, you will be hit with heavy fees.
Through the MCA, the amount that you pay on every month is going to be based on your debt and credit card sales of your business. If in case your business performs well, you are then able to pay more. When time is not so good, you then will pay less. The loan payment is then always going to stay on your budget.
Knows What you Expect
If you are going to get a bank loan, you could end up worried on the APRs and also on the final payoff amounts and you may end up pressured in paying the loan as soon as you are able to save on interest.
These kind of complicated things are in fact removed from MCAs. When you get an MCA, you are then able to know your final payoff amount. There are no advantages however in paying the loan in advance.
No Collateral Requirement
A bank loan may need collateral through the form of your personal property or perhaps your business. Failing to make the payments for the loan could result to a big loss. MCA on the other hand are unsecured loans, which will help protect to avoid losing some of your precious property.
Even though each business situation is really different, MCAs are however the best option that you could try for.